Gold price trims early gains to over 1-week tops

New York (July 4)  Gold built on previous session's goodish rebound from 6-1/2 month lows and continued gaining positive traction for the second consecutive session.

The recent US Dollar corrective slide was seen as one of the key factors benefitting dollar-denominated commodities - like gold. This coupled with retracing US Treasury bond yields, with the benchmark 10-year yield falling to a one-month low level of 2.833%, provided an additional boost to the non-yielding yellow metal.

Meanwhile, lingering trade-war fears continue to weigh on investors sentiment and the same was evident from a sharp overnight fall in the US equity markets, which extended an additional supporting hand to the precious metal's safe-haven appeal.

A combination of positive factors kept the positive momentum intact and lifted the commodity to over one-week tops during the Asian session on Wednesday, albeit lacked any strong follow-through.

A goodish pickup in the USD demand over the past hour or so, coupled with a modest rebound in the European equity markets kept a lid on any further appreciating move for the commodity.

Moreover, investors also seemed reluctant to place any additional bullish bets ahead of this week's important releases, including the latest FOMC meeting minutes and the keenly watched US monthly jobs report, which would help determine the metal's next leg of directional move.

Technical levels to watch

The $1252 area now seems to act as an immediate support and is followed by support near the $1248-47 region, which if broken might negate prospects of any further recovery.

On the flip side, sustained move beyond the $1260-61 region is likely to accelerate the recovery move towards $1266 supply zone before the metal eventually aims towards testing its next major hurdle near the $1272-73 area.

FXstreet